Large Tel Aviv seafront lot for sale

The lot between Herbert Samuel and Hayarkon Streets is worth up to NIS 300 million.

The Tel Aviv Magistrates Court yesterday approving putting a luxury lot at 7 Hayarkon St. up for sale. Judge Amit Yariv granted the petition by some of the landowners to dissolve the cooperation between the owners, who have failed to reach agreement for over a decade. An approved urban building plan for construction of a 15-storey residential tower with 70 apartments and 10,000 square meters of main space and services space applies to the site. Real estate experts say that the lot is likely to be sold for NIS 250-300 million.

Unoccupied lots available for construction on the Herbert Samuel and Hayarkon traffic arteries are considered extremely attractive for residences and hotels and the highest prices in Tel Aviv can be obtained for apartments on these streets. Two towers have been constructed around the lot at 7 Hayarkon in recent years. One is the 10 Herbert Samuel project, in which businessperson Gabriel Tamman bought a 19th floor penthouse from Liora Ofer for NIS 47 million in 2013 and Canadian Jewish developer Sylvan Adams bought a 1,000-square meter penthouse on the 20th and 21st floors for NIS 120 million in 2014.

The second project is Sea One, which includes the Royal Beach Hotel constructed jointly by Electra Ltd. (TASE: ELTR) and Oranim. Russian oligarch billionaire Valery Kogan bought a 22nd-storey penthouse in Sea One for NIS 110 million in 2009.

The 6.4-dunam (1.6-acre) lot on which the court made its ruling is bordered by Hayarkon St. on the east, Nehemiah St. on the north, Daniel St. and Herbert Samuel S. on the west. A residential tower has already been built on another lot within this area. A plan for construction of two residential towers on the two lots was approved in 1997. Ofer Investments built the 10 Herbert Samuel project, but the many owners of the 7 Hayarkon could not agree on how to exercise their rights in the land.

In January 2017, some of the landowners filed a petition for dissolution of the cooperation in the land, saying, "Although a project can be built on the lot immediately, as was done with lot A, over 13 years have passed since the plan was approved, and the owners of the rights have not succeeded in developing the land because of the burdensome multiple ownership. The various efforts made over the years were unsuccessful," the petition states. "This state of affairs is causing serious damage to the petitioners and the respondents and their ability to take advantage of their ownership rights in the lot, and is nullifying the planning trends in the area, as reflected in the plan."

Yariv ruled that the cooperation would be dissolved through the sale of the lot to the highest bidder: either to one of the landowners buying the rest of the rights or to an outside buyer. He also rejected allegations by some of the landowners that the future buyer should be obligated to contract a combination deal with the holders of rights (providing construction services), because such an undertaking is liable to make the entire deal less attractive. Yariv therefore ordered that the land should be sold free of obligations, which will not prevent the holders of rights in the land from freely contracting an agreement with the future buyer.

In similar rulings, judges usually appoint a receiver to take responsibility for selling the land at auction. Yariv said that since there were many owners with differing views, appointing one of the lawyers representing the parties as a receiver would be liable to delay action. He therefore ruled that the holders of rights were entitled to propose receivers to represent them up until November 1, when the court would rule on the appointment of the receiver.

Almost half of the rights in the land are held by businessperson Eli Tamir and companies owned by him, but the rest of the land is held by dozens of private owners, some represented by Adv. Maimon Avitan. The petitioners for dissolution of cooperation were represented by Advocates Shlomo Bracha and Doron Rosenblum from the Bracha, Rosenblum, Sadot law firm.

Published by Globes [online], Israel business news - en.globes.co.il - on October 4, 2018